Farmers-to-be can't afford the fields

CHAMPAIGN, ILL.
— Todd Weitekamp longs to work with tractors and machinery, to get dirty, to watch plants grow. Strong, clean-cut, and amiable, he grew up in the Illinois countryside baling hay, tending cattle, and "walking the beans" - trudging down long rows of soybeans, yanking weeds.

Mr. Weitekamp wants nothing more than the opportunity to farm. But he spends his days driving the flat highways and dusty back roads of central Illinois as the representative of an Iowa seed company, happy to be close to farming and yet endlessly reminded of what lies beyond his reach: land.

"The price of farmland has just been skyrocketing the past few years," he says. "It makes it very hard for anybody to get into farming."

The dark prairie soils of central Illinois grow some of the world's finest corn and soybeans. They also command steeply rising prices, inflated in part by investors who snap up farmland across the Midwest. While rising prices are good for older landowners, whose land may represent a life's savings, they make breaking into the farming business tougher than ever and are the most recent of many developments that are putting a way of life at risk.

Farmland, like other real estate, is appreciating throughout the country. The Federal Reserve Bank of Chicago reported in May that farmland values in the region rose an average of 10 percent over the preceding year and as much as 14 percent in some states, including Illinois.

Steven Ford, a farm-loan manager for the Farm Service Agency (FSA) in Normal, Ill., says he's seen fewer and fewer aspiring farmers. The FSA loans money to farmers whose circumstances make it difficult to borrow from a bank.

"A couple years ago ... prices were maybe $3,500 an acre," Mr. Ford says. "At this point they're $4,500 an acre or more. It's definitely dropped off to minimal interest." Those farmers who come in find their hopes dashed when Mr. Ford reveals what their payments would be.

But the consequences of the land boom go well beyond personal disappointment. People concerned about the fate of rural America worry that fewer beginning farmers will only hasten the decline of farming communities.

"We're already having trouble in the churches," says Todd Stewart, an organic farmer in Norfolk, Neb. "Every year we lose more than we gain. It's the same way with businesses and with schools. And a lot of it goes back to the fact that no young farmers are going into farming."

Most young farmers don't start out by buying "ground," as it's called across the Corn Belt. Usually they rent it until they can save enough to buy. But rising land values are driving rents to prohibitive levels, too.

Erik Christian, a 23-year-old agronomy graduate from Storm City, Iowa, says he's frustrated by a reluctance to take new farmers seriously. "I've talked to everyone and his brother to see if they have any ground to rent," he says. "You never hear back from them."

To be sure, people are still becoming farmers. But most are the sons and daughters of farm families who benefit from their parents' land, equipment, and connections. Yet even for them, say experts, land prices can make it harder to enlarge an operation and make it support two families instead of one.

A more subtle change is also thwarting new farmers. Until recently, many farmers rented land on shares, splitting their crops with the landowner. Sharecropping helped ease new farmers into the business because it required less money up front and spread out the risk. But in recent years landlords, increasingly absent, are insisting on riskier cash rents.

Economists point to two reasons for the rising price of farmland. First, low interest rates have made it an attractive investment. Most land sales in Illinois involve investors, not farmers. And many are buying land in the southern part of the state to avoid paying high taxes on land they sold for development near Chicago. Experts say these purchases drive up land prices all over Illinois.

Federal crop subsidies also have driven up land values. Michael Duffy, an economist at Iowa State University, estimates that the subsidies inflate prices as much as 45 percent.

The rising cost of land is one of many changes transforming the rural Midwest. The farm population is aging, and landowners are increasingly the children of farmers who have decamped to far-away cities and lost interest in farming. At the same time, farms are getting bigger and machinery more expensive. Tractors now come equipped with GPS systems to steer them across fields by satellite - and farmers feel pressured to justify such purchases by acquiring more land.

Competition among farmers for land has grown fierce as well. Scott Reifsteck, a corn-and-soybean farmer from Tolono, Ill., lost half his land when a farmer who rents tens of thousands of acres across the state outbid him on 800 acres his family had been renting, and living on, since 1945.

"I treated it like my own," Mr. Reifsteck says, gazing across someone else's new corn. He is dismayed that the new tenant has neglected to plow along the contours of a small watercourse, as he and his father did. "They came in this spring and charged up and down the slopes in total disregard of what the ground needs," he says. "All they cared about was getting their crop in."

Almost everything costs more, including fertilizers, fuel, and health insurance. But land is critical, and experts say its rising cost may force aspiring farmers to curtail or at least postpone their ambitions.

Josh Kamerer found a job at the University of Illinois Champaign's Large Animal Clinic, shoveling hay and straw. He also works part time for a farmer near his home in Philo. "I've thought of a lot of ways to get into farming," he says. "None of them have panned out."

Iowa State's Beginning Farmer Center keeps tabs on farmers looking for a way in. John Baker, who directs the center, advises them to look for alternatives to Iowa's costly regimen of corn and soybeans.

"They don't have the money. They can't buy their way in very effectively," he says. "What they do have is education and labor and energy. I think it's a tremendous problem if we're going to put people into agriculture in this borrow-and-buy model."

Benjamin Leichty of Wayland, Iowa, is one of the few who may succeed. He graduated from Iowa State in May and is working for two farmers, milking cows for one and helping the other grow organic grains. But the organic farmer plans to retire soon and has invited Mr. Leichty to rent his farm.

"It would be hard for me to farm conventionally and try to buy ground," Leichty says. "I could hardly pay the interest without a job off the farm. So when this opportunity came up to farm organically, I thought it would be a good one."

For Weitekamp, too, one prospect is tantalizingly near. His grandmother is thinking of selling 68 acres - what's left of the family farm. Just maybe, he thinks, prices will fall far enough for him to buy it. Most bankers don't expect that to happen soon. But he is waiting and hoping just the same.